The long wait for a supermarket downtown is finally over.
After more than 50 years without a name brand grocery store and nearly 10 years waiting for one to open, Ralphs Grocery Co. is slated to open a 50,000-square-foot upscale store in the South Park neighborhood Friday, just a few blocks from where the original Ralphs general store opened 134 years ago.
And that opening will happen even if there is a grocery worker strike, Ralphs Supermarkets president Dave Hirz told the Business Journal last week while touring the store at Ninth Street between Flower and Hope streets
"We will open this store on July 20 regardless of what happens with the negotiations," said Hirz. He believes a contract dispute between workers and the big supermarket chains would be resolved.
The union representing 65,000 grocery workers at Ralphs, Albertsons and Vons stores has the approval of workers to call a strike if negotiations over the contract that expired in May reach another impasse. And the grocery chains have said that if any strike or walkout hits one of the chains, all of the chains would move to lock out the remaining union employees.
The potential for labor strife has apparently put a damper on opening festivities, which Hirz said will be "fairly low key." While local politicians have been invited to a ribbon-cutting, an aide to one local official acknowledged some wariness. "If there's a strike on, I'm not sure the elected officials will want to cross any picket lines to attend the opening. It could be very awkward," the aide said.
Whatever the case, news of the opening couldn't come soon enough for the growing numbers of downtown residents and boosters who have waited through years of delays associated with the store opening. The area's estimated 30,000 residents have had to trek to markets well outside of downtown or rely on small local grocers or markets, while some residential developers had been somewhat reluctant to proceed with their projects until it became clear that the Ralphs store would come.
"The symbolism of this particular opening is revolutionary, given the history of this community," said Carol Schatz, president and chief executive of the Central City Association and the Downtown Center Business Improvement District. "So many people thought that downtown would never again be a place where thousands of people would live and shop. This signifies more than anything else that we do have a critical mass of residents here."
Delays plague project
In the early decades of the last century, there were several major markets in the downtown area serving a bustling residential community. But after World War II, city redevelopment officials looked at the decaying housing stock and decided to tear down most of the units, including Victorian-era mansions on Bunker Hill. As the residents left or were forced out into the suburbs, most of the markets shut down, including the last Ralphs store at Seventh and Figueroa streets in 1951. Only the Grand Central Market and mom-and-pop grocery stores remained. Ethnic stores have opened in the area since then.
Ralphs, now a division of Cincinnati-based Kroger Co., first announced back in 2001 that it would construct a store as part of the proposed Market Lofts project and Ninth and Flower streets and a groundbreaking was held in May 2003 featuring then-Mayor James Hahn.
But the Market Lofts project a joint venture between CIM Group Inc. and Lee Homes Inc. encountered significant construction-related delays and cost overruns, forcing Ralphs in turn to delay its store. Among the complications: figuring out how to put a swimming pool directly on top of the grocery store. When complete later this year, the Market Lofts will consist of 267 one- and two-bedroom lofts on six floors above the Ralphs store. There will be 126 parking spaces reserved for Ralphs customers.
Other ground floor retail space will feature Coffee Bean & Tea Leaf, a Coldstone Creamery, Quiznos Sub and the UPS Store.
It wasn't until February of this year that construction on the Ralphs store began in earnest, including $3.5 million worth of fixtures and related equipment. But while the delay was frustrating to nearby residents and downtown boosters, it prompted Ralphs executives to re-evaluate their store layout.
"We originally intended to open this as a typical Ralphs," Hirz said. "But we saw the demographics changing with all these loft projects and higher income residents moving in and so we decided to go with our more upscale Fresh Fare format."
That meant more space devoted to produce, meats, seafood and other fresh products as opposed to the packaged goods that dominate most supermarkets. And while most supermarkets today have a fresh meats counter, seafood department and bakery, this store will also have a sushi station, a "cheese island," a meat-carving station and an olive and antipasti bar.
Furthermore, in keeping with what Hirz said is a one-stop shopping destination, the store will also have a dry cleaners, pharmacy and a "wine cellar" an enclosure for hundreds of wine bottles.
Part of the reason for this eclectic offering of services is that the store is intended to serve two audiences: local residents and workers in nearby offices who stop by to pick up items on their way home.
Hirz said he expects the store to attract more customers than the average Ralphs store, but that those customers will tend to spend less than patrons of other Ralphs stores. "There are few residents with kids downtown, so we're not expecting many purchases for big families," he said.
Instead, the store will stock a greater proportion of "home meal replacements and sandwiches and salads," to cater to a younger crowd that lives on-the-go. Hirz said this decision was made in part after he traveled to Britain last year to look at the successful Tesco plc chain, which is planning to open dozens of stores in Southern California, including one about two miles away at Adams Boulevard and Central Avenue.
News of the imminent opening of the downtown Ralphs store brought sighs of relief to downtown residents last week.
"So it's finally opening. I'm really looking forward to it," said Malvina Hoxha, a student at the nearby Fashion Institute of Design and Merchandise who lives in one of the new loft buildings. "I've been here a year and it's quite a chore when I have to go down to the Ralphs near USC."
One instructor at the institute goes even farther afield for his shopping. "When I need to get groceries, I hop onto the 60 (Pomona) Freeway and go to a store out that way," said instructor Richard Collar, who lives in Bakersfield but rents in downtown for the days he teaches. He said he would go to the new Ralphs, but only for short-term essentials. "I'll still do most of my major grocery shopping in Bakersfield."
Other downtown residents avoid these commutes to the supermarkets ringing downtown and order their groceries to be delivered.
"There's no place to grocery shop so the homeowners are resorting to grocery deliveries," said Denise Morton, president of Long Beach-based Entourage Concierge Services Inc., which recently won a contract to provide concierge services at the Luma South Lofts at 11th and Hope streets. "The grocery requests I've received have been somewhat problematic. It will be so much easier with a store just two blocks away."
With so much pent-up demand, developers and grocery chain competitors are watching the Ralphs experiment with intense interest, with an eye towards opening additional stores in the downtown area. Already, Ralphs and two other unnamed chains are in talks with New York-based Related Cos. to place a market or up to 50,000 square feet in the first phase of the Grand Avenue project at First and Olive streets.
Related of California president Bill Witte said a decision on the operator and the size of the store could be made by the end of the year.
Meanwhile, the Monian Group, another New York-based developer, is reportedly considering putting a 50,000-square-foot market in its planned condominium tower across from the Staples Center.
Whether these markets go ahead as currently envisioned may depend on the performance of the Ralphs store, said Mark Tarczynski, senior vice president with the downtown office of CB Richard Ellis Group Inc.
"It will be very apparent whether or not this store is a success in the first 90 days," Tarczynski said. That is, unless there's a strike and/or lockout, which could negatively skew results.
Tarczynski said he is not expecting a rush of grocery chains looking to snap up space downtown beyond what's already in the works.
"There's probably a good argument for one on the north side of Bunker Hill in the Grand Avenue project. And there may be a good argument for one on the West side, near the Harbor (110) Freeway. But I don't see the demand yet for more than three markets downtown. After that point, they would start cannibalizing each other."
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Grocery Sales Exceed Expectations at Downtown Ralphs
- DOWNTOWN--Downtown L.A. May Be Ready To Land a Store
- More in Store for Grand Avenue?
- Downtown Ralphs' Super Sales
- RETAIL---Pharmacist's Downtown Foray Yields Surprisingly Strong Sales
- Real Estate Column---Ralphs Looks for Downtown Site as Population Grows
- Developer Nears Downtown Deal For Market Site